Stock prices in London opened higher on Thursday, with equity markets recovering cautious optimism after softer-than-expected US jobs data, with more US jobs reports to come.
The FTSE 100 index opened up 5.09 points at 7,417.54. The FTSE 250 was up 69.39 points, 0.4%, at 17,562.29, and the AIM All-Share was up 0.98 of a point, 0.1%, at 696.19.
The Cboe UK 100 was up 0.1% at 739.99, the Cboe UK 250 was up 0.4% at 15,278.87, and the Cboe Small Companies was flat at 13,233.17.
In European equities on Thursday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was flat. Disappointing German trade data fuelled fears of that Europe’s largest economy would return to recession in the third quarter.
Oil majors BP and Shell were weighing on the FTSE 100, down 1.2% and 1.5% respectively, tracking the price of oil lower.
Brent oil was trading at $86.11 a barrel early Thursday, falling further from than $87.91 late Wednesday. It has fallen sharply from $92.29 early Monday.
‘Rising suspicions that the global economy is headed straight into a wall didn’t spare oil bulls yesterday,’ said Swissquote Bank’s Ipek Ozkardeskaya.
The US Energy Information Administration on Wednesday reported finished motor gasoline supplied, a proxy for demand, fell last week to about 8 million barrels per day, its lowest since the start of this year.
Elsewhere on Wednesday, the Opec+ alliance decided to maintain production at current levels, while Saudi Arabia and Russia reaffirmed their commitment to additional cuts until the end of the year.
Imperial Brands rose 1.4% following an upbeat trading update.
The tobacco company said it was on track to deliver on annual guidance for the twelve months ended September 30, as it announced a further £1.1 billion in share buybacks.
Imperial said the implementation of its five-year strategy was driving further improvements in operational and financial performance. It expects constant currency growth net revenue growth in tobacco and next-generation products in the low single digits, including Russia, and group adjusted operating profit to accelerate to the lower end of its mid-single digit range. It said strong tobacco pricing was driving the growth.
However, the stock is down 5.2% over the past five days. It had closed down 3.0% on Wednesday, after Prime Minister Rishi Sunak announced proposals to progressively restrict the legal age for buying tobacco in the UK.
Unite added 1.3% after reporting strong trading and a change in leadership.
The student accommodation company said its chief executive Richard Smith will step down at the end of the year, having been in post since 2016, and with the company for 13 years. He will remain with the firm as an advisor until September 2024. Joe Lister will become CEO from January 1. Lister has been Unite’s CFO for 15 years, and with the company for 22 years.
The firm also reported ‘record’ occupancy and strong rental growth for the 2023/2024 academic year.
In the FTSE 250, Volution was the top performer, up 6.7%.
The designer and manufacturer of energy-efficient indoor air quality solutions hailed ‘ever tightening regulations’ focused on lowering carbon emissions as boosting demand for its business as it declared a higher payout after annual profit rose.
For the year ended July 31, the West Sussex-based firm reported a pretax profit of £48.8 million, up 3.4% from £47.2 million a year prior. Revenue climbed 6.6% to £328.0 million from £307.7 million.
Volution declared a final dividend of 5.5 pence per share, up from 5.0p a year prior. This brings the total dividend to 8.0p which is 9.6% higher than 7.3p a year prior.
Diversified Energy added 3.0%
The company noted a recent decline in its share price, and said it was ‘unaware of any operational or company specific reason’ for this. The stock is still down 15% over the past five days. The company said there has been no material change in its financial or operational condition since its updates on September 1 and 26.
It also announced it is no longer pursuing its proposed US listing, given the current equity market dynamics.
Meanwhile, UK communications regulator Ofcom said it was concerned about the market dominance of Amazon Web Services and Microsoft in UK cloud infrastructure services.
Ofcom said its study uncovered features that would limit competition, and make it hard for UK businesses to switch and use multiple cloud suppliers. It has referred the public cloud infrastructure services market to the Competition & Markets Authority for further investigation.
‘Cloud computing has become critical for many businesses across the UK economy - including telecoms companies, broadcasters and public sector organisations - and has transformed the way they deliver services on which we all rely every day. It uses data centres around the world to provide UK businesses with remote access to services such as software, storage and networking,’ Ofcom explained.
In Asia on Thursday, the Nikkei 225 index in Tokyo closed up 1.8%. In mainland China, financial markets remained closed for the Golden Week holiday, while the Hang Seng index in Hong Kong was up 0.2%. The S&P/ASX 200 in Sydney closed up 0.5%.
Market sentiment got a boost after softer US jobs data eased fears over interest rates. The JOLTS data earlier in the week had pointed to a hotter-than-expected jobs market, prompting fears of a protracted period of high interest rates in the US.
However, on Wednesday, the ADP national employment report showed job growth in the US private sector slowed significantly in September.
Private sector employment increased by 89,000 jobs in September. In August, private sector employment increased by 180,000 jobs, upwardly revised from 177,000. A lesser slowdown to 153,000 was expected for September, according to FXStreet cited consensus.
Later on Thursday, there will be the weekly jobless claims data for the US. This will set the stage for Friday’s nonfarm payrolls data, the official monthly employment report. The reading is expected to show jobs growth of 170,000 in September, easing from 187,000 in August.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, the S&P 500 up 0.8% and the Nasdaq Composite up 1.4%.
The dollar was little changed against major currencies in early exchanges in Europe.
Sterling was quoted at $1.2143 early Thursday, little changed from $1.2144 at the London equities close on Wednesday. The euro traded at $1.0509, down from $1.0515. Against the yen, the dollar was quoted at JP¥148.82, flat versus JP¥148.83.
Gold was quoted at $1,822.00 an ounce early Thursday, down from $1,826.09 on Wednesday.
Thursday’s economic calendar has the latest US jobless claims data at 1330 BST, after a UK construction PMI reading at 0930 BST.
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